An ambitious plan to create a new cryptocurrency services business from the remains of bankrupt lender Celsius has hit a roadblock as the U.S. Securities and Exchange Commission (SEC) conducts an investigation, according to a source familiar with the matter.

The SEC, along with the Celsius Creditors Committee and investment vehicle Fahrenheit, are engaged in a back-and-forth regarding the disclosure of assets held by the Celsius estate, the source told CoinDesk. Fahrenheit, which consists of Arrington Capital, U.S. Bitcoin Corp., and Proof Group, emerged as the winners of a bidding contest in May to issue shares in a new crypto business using the residual assets of the bankrupt lender.

Earlier this month, Fahrenheit obtained approval from a bankruptcy court for its reorganization plan. The plan involved distributing approximately $2 billion worth of bitcoin (BTC) and Ethereum's ether (ETH) to creditors, in addition to equity in the proposed new company. The new entity aimed to continue and expand Celsius' bitcoin mining operations, stake Ethereum, profit from other illiquid assets, and explore new business opportunities, as outlined in a filing.

However, the SEC's investigation has put the plan on hold. If the formation of the new crypto business falls through, the approved backup plan is to wind down and liquidate Celsius' assets.

This delay marks a setback for Fahrenheit's ambitious vision and the hopes of creditors to recover their investments. The investigation by the SEC underscores the agency's commitment to ensuring regulatory compliance in the crypto industry. While the specifics of the investigation have not been disclosed, the scrutiny suggests the SEC's careful assessment of the proposed business's operation and the protection of investors' interests.

The timetable for resolving the SEC's concerns and restarting the formation of the new crypto services business remains uncertain. Celsius creditors, Fahrenheit, and other stakeholders await further updates in this ongoing process.